Lowe, Garry William and Pittiglio, Julie v Marriott, Maxwell Frank and Marriott, Alice Mary and Marriott, Marcus Sorell and Maracoon Pty Ltd
[1998] TASSC 111
•18 September 1998
111/1998
PARTIES: LOWE, Garry William
PITTIGLIO, Julie
v
MARRIOTT, Maxwell Frank
MARRIOTT, Alice Mary
MARRIOTT, Marcus Sorell
MARACOON PTY LTD
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 1504/1992
DELIVERED: 18 September 1998
HEARING DATE/S: 6 August 1998
JUDGMENT OF: Cox CJ
CATCHWORDS:
Procedure - Discovery and interrogatories - Interrogatories - Upon what matters - In general - Whether interrogatories directed to defendant as to the contents of conversations relied on by plaintiff are fishing and oppressive or sufficiently material.
Barbarian Motor Cycle Club Incorporated v Koithan (1984) 35 SASR 481, discussed.
Aust Dig Procedure [464]
Procedure - Discovery and interrogatories - Interrogatories - Upon what matters - What questions disallowed - In general - Whether interrogatories as to income derived are oppressive.
Aust Dig Procedure [466]
REPRESENTATION:
Counsel:
Plaintiffs: W A Ayliffe
Defendants: C Tsamassiros
Solicitors:
Plaintiffs: Ayliffe & Ayliffe
Defendants: Butler McIntyre & Butler
Judgment category classification:
Court Computer Code:
Judgment ID Number: 111/1998
Number of pages: 6
Serial No 111/1998
File No 1504/1992
GARRY WILLIAM LOWE and JULIE PITTIGLIO v
MAXWELL FRANK MARRIOTT, ALICE MARY MARRIOTT,
MARCUS SORELL MARRIOTT and MARACOON PTY LTD
REASONS FOR JUDGMENT COX CJ
18 September 1998
This appeal from the Master by way of rehearing requires me to adjudicate upon the first and second-named defendants' objections to answer certain interrogatories directed to them by the plaintiffs. I shall hereafter refer to them as "the defendants" as the addition of the third and fourth-named defendants is not material for present purposes.
The action involves a dispute in respect of a Victorian abalone licence which was available for sale by tender in about April 1992. The plaintiffs allege in their statement of claim, that they and the defendants entered into a partnership agreement for the purpose of acquiring and operating the full beneficial interest in the licence. They claim that the agreement included such terms as that the capital necessary to acquire the interest would be provided equally by the parties, that they would share equally the outgoings of and incidental to the operation of the licence, and likewise its profits and that the management of the business would be undertaken by them jointly. They claim that the partnership agreement was made partly orally and partly by conduct. Insofar as it was oral, the agreement was made, they allege, during conversations between the plaintiffs and the defendants in about October 1991:
(a) at the plaintiffs' address at 25 Powell Road, Blackmans Bay;
(b)on or about 17 January 1992 at the residence of the defendants at Montgomery Court, Sandy Bay;
(c) on or about 23 January 1992 at Powell Road;
(d) on or about 1 February 1992 at Montgomery Court;
(e) on 9 March 1992 at an unspecified place;
(f) on 27 March 1992 at Montgomery Court;
(g) on 4 April 1992 at Sisco's Restaurant in Hobart;
(h) on 24 April 1992 at the Hobart Casino; and
during other conversations in about March and April 1992 at the residences of the plaintiffs and the defendants, the plaintiffs being unable to state the dates of such conversations.
It is also claimed that it was made as the result of conversations between the first-named plaintiff and the first-named defendant in October 1991 at Powell Road.
Insofar as it was constituted by conduct, the conduct consisted of, or is to be inferred from the following:
(a)between 23 October 1991 and 18 March 1992, the defendants knew that the first-named plaintiff sold his existing abalone quota unit and commercial abalone diving entitlement for the purposes of financing the share of the plaintiffs in the abalone licence intended to be acquired;
(b)the parties submitted at least four tenders for the acquisition of the abalone licence in mid-1992;
(c)conversations between the defendants and one Stephen Chaplin, a finance broker, concerning the acquisition of the abalone licence, the submission of tenders, the amount of quota of fish remaining available to be caught pursuant to the licence, and the likely purchase price of the licence and the appropriate procedure for the acquisition and financing of the licence; and
(d)the fact that the plaintiff had received $50,000 from a Mr David Torelli as security for allowing Mr Torelli to use the licence to catch the abalone, pursuant to the licence, the defendants, it is alleged, did not demur or object to the payment or receipt of that sum.
In the alternative, the arrangement between the parties is pleaded as a joint venture agreement for the acquisition by equal contribution and as equal tenants in common of the beneficial interest in the licence and an agreement to share equally the profit generated by its operation. In the further alternative, the arrangement was pleaded as an agreement to enter a partnership and/or joint venture. For convenience sake, I will simply call it an arrangement. By reason of that arrangement, the plaintiffs allege the defendants, at all material times, owed them a fiduciary duty of perfect fairness and utmost good faith.
The plaintiffs allege that on about 21 July 1992, the beneficial interest in the licence was purchased by the defendants for $1,220,000 whereafter the defendants purported to operate the licence on their own behalf and failed to advise the plaintiffs that they had been successful in purchasing it. Further, they registered the licence in the name of their son who was an abalone diver. Since that date, it is alleged that the defendants have operated the licence for their benefit alone and have not distributed or shared any of the profit from the operation of the licence.
Among the relief sought by the plaintiffs is an account with respect to the purchase of the licence and its operation and the sale of any part thereof, damages and, in the event that the partnership is established, an order for the settling of accounts, pursuant to the Partnership Act 1891, s49, and an order dissolving the partnership. The defendants sought particulars of the various conversations pleaded as the oral component of the arrangement and particulars were supplied by the plaintiffs. Save that they admit that there were conversations between the parties at 25 Powell Road and Montgomery Court during March and April 1992 and that the licence was registered in the name of Marcus Sorell Marriott, all other allegations in the statement of claim are denied.
On 18 September 1997, the plaintiffs' solicitors delivered to the defendants, a lengthy set of interrogatories for their examination. The "abalone licence" was defined for the purposes of the interrogatories as abalone licence No A47 issued pursuant to the Fisheries Act 1968 (Vic), while "beneficial rights" was defined as meaning any right, benefit, entitlement, income or gain arising from or associated with the taking of abalone, pursuant to the abalone licence. Interrogatory No 1, and the answers supplied by the defendants were as follows:
| "During 1991 and/or 1992 did the Defendants hold or have any discussion with: | During 1991 - No |
| (a) Garry William Lowe; | During 1992: (ii) Yes (iii) Yes |
| (b) Julie Pittiglio; | (b) (i) Yes (ii) Yes (iii) Yes |
| (c) any agent or broker representing Garry William Lowe or Julie Pittiglio; | (c) Objection taken |
| — concerning any of the following matters: | |
| (i) purchase of the abalone licence; (ii) any other abalone licence; (iii) beneficial rights." |
Interrogatory No 2 was expressed and answered as follows:
| "If yes to any part of Interrogatory No 1 state: | Objection taken |
| (a) the date of each such discussion; | |
| (b) with whom of the persons referred to in Interrogatory No 1 such discussions took place; | |
| (c) with reference to each such discussion state the substance of each such discussion as fully as you are able." |
The objection taken to that particular interrogatory was that it was:
"(a)too wide, oppressive and fishing;
(b)the matters inquired into are substantially irrelevant and not sufficiently material; and
(c)the Plaintiffs and the Defendants all held interests in abalone licences and during 1992 from February 1992 onwards, I [that is the second-named defendant who swore the affidavit] and the firstnamed Defendant had numerous discussions with the Plaintiffs and during some of those discussions the abalone licence and other abalone licences, including Tasmanian abalone units, New South Wales abalone licences, other Victorian abalone licences, South Australian abalone licences and Western Australian abalone licences were referred to in discussions."
The first-named defendant swore a similar affidavit, taking the same objection.
Similar interrogatories were directed at discussions concerning the acquisition or operation of the abalone licence, all beneficial rights, the capital necessary to acquire them, the distribution of profit from the operation of the licence, beneficial rights or any other abalone licence, the diver to be retained to physically catch the abalone and the funding of the acquisition of these interests. The defendants have objected to giving answers as to the substance of such discussions. The interrogatories in question are 2, 4(d), 6(d), 10(d), 12(d) and 14(d). The plaintiffs seek an order that the defendants supply further and better answers to these interrogatories (inter alia).
Mr Tsamassiros submits that his client ought not to be required to make further answer. He submits that by virtue of the nature of the pleadings and the brevity of the particulars of them supplied by the plaintiffs, it is hard for the defendants to answer. In short, he claims, the plaintiffs are seeking to fish out a case and that the interrogatories are oppressive. In Attorney-General v Gaskill (1881) 20 Ch D 519 at 528 - 529, Cotton LJ said:
"The object of the pleadings is to ascertain what the issues are, the object of interrogatories is not to learn what the issues are, but to see whether the party who interrogates cannot obtain an admission from his opponent which will make the burden of proof easier than it otherwise would have been."
In that case the defendant relied upon a conversation which he said had induced him to sign a material document without its having been read over and explained to him. The court held that the plaintiff was entitled to interrogate and have the defendant give his version of the substance of the conversation. An obligation to disclose the substance of a conversation upon which a party relies has similarly been recognised in Eade v Jacobs (1877) 37 LT 621 and West v Conway (1923) 23 SR(NSW) 344. However, this is not a case where the defendants are setting up conversations upon which they are seeking to rely. The plaintiffs assert that in the course of certain conversations, things were said which formed part of a legally binding arrangement entered into between the parties. Although the defendants have acknowledged in earlier interrogatories that some conversations were held at which, for example, the acquisition of the abalone licence was discussed, it is not they who rely on the conversations and it seems to me that to enquire what the substance of each such conversation was is simply to fish for something which may advance the plaintiffs' case or to ascertain the evidence by which the party interrogated intends to refute the case of the interrogating party. The questions are so wide that they invite answers describing discussions which may have no relevance to the existence of the disputed arrangement.
In Aspar v Dovala (1987) 74 ALR 550 at 554, Woodward J said of the word "oppressive" that in his view it meant:
"… unfair, or unreasonable, in the sense that a good deal too much is expected of the party questioned. It may be that the details sought would take many hours to extract from records and would only be relevant to some side issue in the case. Or the question may be so ambiguous that it would be unfair to expect the party questioned to make assumptions about its meaning. Or the question may cover a wider geographic area or a longer period of time than is reasonably necessary in readying the case for trial. There are many questions which might be admissible in cross-examination, but are by their very nature inappropriate, and thus oppressive, in interrogatories."
In the present case, the plaintiffs are seeking to rely on certain conversations, the substance of which are or should have been particularised in response to the defendants' request. In my view, it is fishing and oppressive for the plaintiffs to now seek the defendants' version of the conversations, not only on those occasions which they have particularised, but on any other occasions when the topic of the acquisition of the licence, its funding and the other matters set out in the interrogatories, has been discussed. On the plaintiffs' own case, there were many such conversations and the cost of preparing responsible answers could be very considerable. As King CJ pointed out in Barbarian Motor Cycle Club Incorporated v Koithan (1984) 35 SASR 481 at 484:
"The interrogatory must … be 'sufficiently material' at the stage at which it is administered and whether it is so is a discretionary judgment to be made by the Court. That judgment must be made in the light of the purposes for which interrogatories are allowed and involves a balancing of the costs and inconvenience involved in administering and answering interrogatories against such contribution as the answers may make to the fair disposal of the proceedings and the saving of costs."
Another group of interrogatories enquires about discussions in 1991 and/or 1992 as to (eg, interrogatory 7) distribution of profits from the operation of the (a) abalone licence, (b) beneficial rights, or (c) any other abalone licence, in the event that the abalone licence and/or beneficial rights were obtained. The defendants have objected to answer the question insofar as it relates to beneficial rights. An affirmative answer requires answers to questions in the succeeding interrogatory. Hence, interrogatory 8, for example, enquires as to date, time, place, parties to and substance of the discussions. I have already dealt with (d), the substance of the discussion. For the same reasons, I am of the view that questions directed to the existence of conversations about beneficial rights are fishing and oppressive. There is an added reason for their being oppressive, for beneficial rights are defined as "any right, benefit, entitlement, income or gain arising from or associated with the taking of abalone pursuant to the abalone licence". The enquiry is directed to a variety of advantages which could either arise from or be associated with the taking of abalone pursuant to the licence. Canvassing each of these sub-questions is a further complication of the process the plaintiffs demand of the defendants. The interrogatories in question are 7(b), 9(b), 11(b), 13(b), 15(iii) and 17(c). The defendants are not required to answer these questions nor interrogatories 8 and 16 which are consequential. The defendants withdraw their objection to answering interrogatory 38 as the third-named defendant has now been joined.
The last group of interrogatories are interrogatories 49, 50, 51, 52 and 53. In substance, they enquire into the income (if any) from the operation of the abalone licence derived by the defendants or by any company owned or controlled by them for each of the calendar years 1992 - 1997 inclusive. They seek to know how much income was derived by each of the first two defendants, the fourth-named defendant and any other company owned or controlled by the defendants. They also seek details of all outgoings and expenses in respect of the operation of the licence in each of those years and the share paid in respect of them by the defendants and their companies. Interrogatory 53 asks whether, in 1996 or 1997, the defendants, or any company under their control, sold the licence or any beneficial rights, and if so, asks them to state when and for what price it was sold, who shared in the proceeds and what capital gain was thereby made.
The defendants object to answer all these questions as being oppressive and premature. They submit that it is a complex task and rely upon an affidavit which was read into evidence, sworn by an accountant in Melbourne who handles the financial affairs of the defendants and Maracoon Pty Ltd. Relevantly he deposed:
"4I am aware that between March 1994 and June 1996 the ownership of Victorian Central Zone Abalone Licence A47 was in dispute and the subject of proceedings in the Supreme Court of Victoria, between 43rd Glitter Pty Ltd (a company associated with Mr and Mrs Marriott's former Accountant, Mr Norman Bell, and his wife), Marcus Sorell Marriott (Mr and Mrs Marriott's son) and Maracoon Pty Ltd. Those proceedings were initiated in March 1994 and were concluded in or about June 1996. As part of the settlement of those proceedings, Victorian Central Zone Abalone Licence A47 was sold by public auction, the auction being held on the 28th day of June 1996. At the auction, a company owned and controlled by Mr and Mrs Marriott, Hanga Pty Ltd, in its capacity as trustee for the Marriott Family Trust, was the highest bidder for the licence and it consequently acquired the interest of A47 previously held by 43rd Glitter Pty Ltd.
5During the period 3rd May 1998 to the 1st August 1998, Mr Bill Barton an accountant employed by Deloitte PBS and who ordinarily has day to day responsibility in completing tasks for Mr and Mrs Marriott and Maracoon Pty Ltd has been on secondment to our Auckland office in New Zealand. Upon his return Mr Bill Barton and I have considered what would be required to prepare financial information that would enable Mr and Mrs Marriott and Maracoon Pty Ltd to provide answers to Interrogatories that I understand have been delivered by the Plaintiffs' Solicitors. I have been provided with copies of Interrogatories numbered 49 - 55 inclusive.
6I am aware that in the period between the initial acquisition of the licence in October 1992 and the resolution of the dispute with 43rd Glitter Pty Ltd in June 1996, the Supreme Court of Victoria had set up a trust into which a proportion of the income of the Victorian Abalone licence was deposited. I am not aware of what records are available for the period October 1992 to June 1996 and Deloitte PBS have not been required to prepare accounts for that period.
7Since Hanga Pty Ltd acquired the interest of 43rd Glitter Pty Ltd, the financial information that will need to be prepared in order to provide answers to the Interrogatories would involve:
a)Adjustment of accounts from financial year ended 30 June 1997 to calendar year ended 31 December 1997 as requested in the Interrogatories.
b)Analyse and collate, for periods where Deloitte PBS acted for the Marriott's, other information required by the Interrogatories, including:
- Breakdown of income earned by each of Maxwell Marriott, Alice Marriott and Maracoon Pty Ltd
-Breakdown of the source of each payment
- Collate details for any sales and profits, losses or capital gains earned.
8I believe that it would involve between 70 to 80 hour of professional times in order to provide the information I would estimate a cost between $8,000 and $9,000. Given that we do not have information prior to 1996 it is difficult to estimate the time required however, it is likely to be significantly greater."
In Parker v Wells (1881) 18 Ch D 477, it was held that interrogatories in respect of the profits of a business in which the plaintiff's funds were claimed to have been improperly employed would not be ordered because it would be oppressive to call upon the defendant to enter into a difficult account which would not help the plaintiff to obtain a decree and would be useless if a decree was not obtained. The case was distinguished in In re Howel Morgan (1888) 39 Ch D 316 where an account of the income received each year from a disputed sum of money could be easily calculated and would enable the court, if it determined the question of entitlement to the moneys in favour of the interrogating party, to make an immediate decree without further assessment.
In the present case, the factual dispute is large and if the plaintiffs fail to establish the existence of a legal arrangement of the type pleaded, the detailed and lengthy preliminary enquiry in respect of possible damages will have been to no avail. From the point of view of convenience, it is preferable that it not be undertaken at this stage.
In the result, the appeal will be upheld and the order of the Master dated 6 May 1998 set aside. In lieu thereof, it will be ordered that the first and second named defendants make further and better answer to interrogatory 38.